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Toronto, June 28, 2012 – The Canadian Federation of Independent Business (CFIB) welcomed today’s announcement that legislation for Pooled Registered Pension Plans (PRPPs) has been given Royal Assent.
“PRPPs will be an excellent addition to the retirement savings options for small business owners and their employees,” said CFIB’s new president Dan Kelly. “Small firms tell us that the main reasons 80 per cent of them do not have any form of company retirement plan for the business owner or their employees are the costs and administrative burden of offering a plan. If properly implemented by provinces and financial institutions, we expect PRPPs to move the ball forward on both fronts,” Kelly added.
“Current pension plans are beyond the reach of most entrepreneurs and company Registered Retirement Savings Plans (RRSPs) quickly become unaffordable as employers must pay payroll taxes like Employment Insurance, Canadian Pension Plan (CPP)/Quebec Pension Plan (QPP) and workers’ compensation premiums on top of any contributions to the plan,” said Kelly. “PRPPs, with no payroll taxes and lower administration fees, should allow more firms to put more money aside for retirement,” Kelly added.
CFIB is calling on provinces to move quickly to implement the legislation and to ensure that PRPPs remain entirely voluntary. “While Quebec has already introduced legislation to move forward, CFIB is very disappointed Ontario intends to block small firms from accessing this improved retirement tool for workers,” Kelly said. “CFIB will be monitoring financial institutions to ensure administration fees are significantly lower than current RRSPs.”
“Brand new CFIB member data reveals that a full third of small firms would consider offering a PRPP in their workplace,” Kelly added. “For our part, we at CFIB are currently examining ways to offer PRPPs to our 109,000 small business members across Canada.”
CFIB is also urging Finance Ministers to shelve any plans to increase CPP/QPP premiums at this time. New CFIB survey data shows that over a third of small firms would be forced to freeze or reduce employee pay and/or cut investment in their firm to accommodate a CPP/QPP hike.
For further information or to arrange an interview with Dan Kelly contact Meghan Carrington or Gisele Lumsden at 416 222-8022 or via [email protected].
As Canada’s largest association of small- and medium-sized businesses, CFIB is Powered by Entrepreneurs™. Established in 1971, CFIB takes direction from more than 109,000 members in every sector nationwide, giving independent business a strong and influential voice at all levels of government and helping to grow the economy.